Ratcliff (1969) noted that an increasing number of the appraiser's clients were not satisfied with sterile value figures, but want professional help in solving complicated real estate problems, calling for a drastic reorientation of the appraisal function.

 

Ratcliff (1969) opined that this reorientation requires a rationalization of appraisal theory and methodology as essential steps toward true professionalism in the appraisal field requiring that the appraiser become an economic analyst as a prerequisite to providing professional counseling.

 

Ratcliff asked who would consider a valuer to be a true professional if unfamiliar with the substantial (1969) literature in urban economics, regional science, location theory, decision-theory, urban land economics, management science, statistics, probability analysis, computer applications and simulation models. All and more of these developments have direct application to appraisal and have the potential for aiding the appraiser in providing truly professional services to clients guiding them toward sounder decisions.

 

Ratcliff said almost 40 years ago that it was a conservative statement that appraisers who still cling to the three approaches are thirty years out of date and those unfamiliar with probability theory and decision theory were at least ten years out of date. An example of a potential need was one in which a client would request a time series of the likely future value of the property in relation to its loan balance.

 

One limiting factor Ratcliff noted is the traditional dogma that the appraiser must avoid ‘speculative’ conclusions about the future. Ratcliff suggests that the appraiser could resolve this concern by deepening the analysis of the real estate factors to extend them in time to provide the client with a long-term view of the productivity of the property. This forecast is critical for solving the brownfield Redevelopers' Problem Number 1.

 

Bienert and Brunauer (2006) differentiate between terms market value (MV) and mortgage lending value (MLV), contending that MLV is not used and/or not fully understood by those referencing International Valuation Standards (IVS), since those referencing them "are mainly under American or British influence." The MLV is referred to as a value-at-risk approach that is similar to the one espoused by Ratcliff, i.e., forecasting the likely future value of a property in relation to its mortgage.

 

Bienert and Brunuer contrast the Ratcliff approach to existing methods by referencing the practice in the UK and Spain "where lenders once again do fund just about 100% of the whole investment sum in anticipation of 'eternally rising prices’." They contend that it is the job of the valuer to inform the lender about the potential future direction of the MV during the loan period by the examination of real estate cycles and site-specific risk. (Redeveloper Problem 1) MLV calls for the valuer to identify and seemingly scientifically quantify risk-also becoming a risk manager. (The Solution to Redeveloper Problem 2).

 

Weber (2005) provided the solutions to both Redeveloper Problems 1 and2.  This thesis also demonstrated the basis for MLV, since the value of most real estate at any point in time is highly dependant on the local economic activity that creates the demand for employment of the local population that use this real estate over time.